Difference Between Management Account and Finance Account

This project report explains the difference between management account and finance account. It discusses the preparation, information, format, and presentation of these accounts. It also highlights the usefulness of financial information for suppliers, customers, investors, government, and managers.

BUSINESS FINANCE

INTRODUCTION
The term corporate finance may be defined as activities which contribute to acquiring and
retaining capital funds to meet financial requirements and general goals of an organization.
Company funds are too important to allow financial decisions for companies by internal accounts
(Aktas, Croci, Petmeza, 2015). The project report reports on the management and financial
report differentiation. The project further outlines the position of all accounting.
MAIN BODY
Explain difference between management account and finance account. Along with their
usefulness to users of financial information.
Management account- Managerial accounts are often called management accounts and can be
described as a resource that offers important management information for making decisions. The
management account is primarily utilized by the organization's management office which is a
combination of financial, non-financial information connected by monetary and nonmonetary
data to internal monitoring structures. In all of this, it must be remembered that the internal
business department uses this account only. For outside owners in businesses, this will not profit.
Finance account- The financial accounting focuses on identification, analysis and recording of
transactions that are important to the business (Drury, 2016). The annual reports that are
available are expected to be published. It includes only statistics on accounting. Even external
stakeholders, and not only internal stakeholders, will use such accounts. For businesses engaged
in stock market dealing, this accounting is important.
Herein, below difference between management account and finance account is done below in
such manner:
Basis Management account Finance account
Preparation It is produced under accounting
administration.
This is prepared under financial
accounting methods.
Information This involves all types of records,
both monetary and non-monetary
Under it, only financial information
regards to various aspects is included.

information.
Need The reports are generated in
accordance with the organization's
demands and expectations.
Across the end of the financial year,
financial statements are typically issued
for one year.
Format of
preparing
report
These accounts can't be located in any
format.
A rising financial modeling structure is in
effect and businesses should follow this
model.
Compulsor
y
This is not important for businesses to
schedule these management accounts.
To businesses, the preparation of such
reports is quite critical. For other
businesses that are classified on the
capital market, such reports must be
conducted (Watson Head, 2016).
Presentatio
n of report
The managerial account is supplied to
only key customers like the
executives, the staff, the management
board and others.
Both internally and publicly, the reports
are submitted. In this way domestic
shareholders make important decisions
and outside stakeholders agree on
investments in the business.
Time period This does not take time to prepare
these administration accounts. It can
always be made.
On the other side, these financial results
are scheduled for a specific period
Importance of financial information for users:
Financial reporting is very beneficial for consumers, both internal and external
stakeholders. Since they take rational action. In this context, this is defined under the value
relevance of financial details for users:
Suppliers- When making choices, suppliers depend on financial details. For the success of an
organization, supplier partnerships are essential. In addition to handling consumer
communications, essential knowledge is required to enable suppliers to select (Weetman, 2010).
It is necessary, appropriate and correct to have financial information. The annual results are

accompanied by these explanations. For order to take appropriate steps, manufacturers will
recognize vital financial information.
Customers- Customers invest in a business and they may often support a vendor who cannot
fulfill their requirements. The company needs to develop partnerships between companies
rigorously. Any company gathers knowledge from a single source and is thus vulnerable to
material hazards of the chain. Unreachable inputs can have a significant effect on an
organization, particularly when the barrier to change is present. The financial reporting provided
by customers contains essential information describing a manufacturer’s strengths. The balance
sheet represents a company's financial position
Investors- There is also a requirement for a thorough analysis of investment policy. Such
research is done only if the financial reports are sufficient (Atrill 2014). The balance sheet and
annual statements offer a clear framework to explain the company's worth to creditors. The
balance sheet describes the financial arrangement of the business by listing net assets, liabilities
and securities. Investors use Annual Information to assess the feasibility of a business to invest.
Potential distributions dependent on annual results can be predicted for analysts. In reality, the
financial results should take into consideration the danger involved with the transaction.
Investors agree on spending in a business
Government- The government will assess the validity of the tax paid in the tax records on the
financial statements. Through reviewing annual data from firms in emerging markets, the State
annually tracks economic growth. In the other side, if there is not adequate statistical details, the
government would consider it difficult to take the appropriate decision to assess the required sum
of revenue.
Managers- Financial information is beneficial to businesses by preparing financial statements to
include detailed financial details. Managers use all necessary tools to take into consideration the
different facets of financial details (Atrill, 2015). Eventually, financial information plays a key
role in the context of taking accurate decisions for managers. This is so because on the basis of it
managers of companies can gather needed information in a quick manner. Due to which they
become able to take corrective actions in accordance of need of business. On the other hands, in
the absence of financial accounting, this might be difficult for manager of companies to take

corrective actions on time. It is so because lack of financial data can lead to different kinds of
issues such as tough competition from competitors etc.
CONCLUSION
The above project review shows that there are considerable differences between the
management account and the financial report. The owners have specific characteristics and
functionality. Throughout the next segment of the study, financial information is essential for
various categories of users, such as internal and external stakeholders such as the state, clients
and others. Everybody has an interest in the accounting statements of businesses.

REFERENCES
Books and journal:
Aktas, Croci, Petmeza, 2015. Is working capital management value-Enhancing. Journal of
Corporate Finance 30, pp, 98-113. Pdf
Atrill 2014. Financial management for decision makers, 7th ed. London FT Prentice Hall, Chapter
10- Working Capital.pdf
Atrill 2015. Management Accounting for decision makers, 8th ed. London Pearson, Chapter 6
The budgeting.pdf
Drury, 2016. Management accounting for business. 6th ed. London Cengage. Chapter 9 The
budgeting process.pdf
Watson Head, 2016. Corporate finance. 7th ed. London Pearson, Chapter 3-Working capital.pdf
Weetman, 2010. Management accounting. 2nd ed. London FT Prentice Hall, Chapter 13 preparing
a budget.pdf